Kellogg School grad leads
Chicago's premier entrepreneurial resource, advancing 'wealth
creation and economic development' in the Windy City and beyond

By
Matt Golosinski

Turn Chicago
into Silicon Valley East?

David
Weinstein '00 sounds like he could do it. He bristles
with the gritty, get-deals-done energy that makes him a powerful
advocate for entrepreneurship.

But
he and his seven-person team at the Chicagoland Entrepreneurial
Center believe that the West Coast model does not do justice
to the Heartland's innovation diversity. In fact, the Kellogg
School graduate says too many people define entrepreneurship
too narrowly, identifying it solely as high-tech ventures.

"We
believe that entrepreneurship, particularly in Chicago, touches
many areas," says Weinstein, president of the CEC, a
nonprofit affiliate of the Chicagoland Chamber of Commerce.
It was founded in 1999 to help regional entrepreneurs build
sustainable and profitable enterprises. "We work with
a variety of businesses: food service, retail, the creative
industries, professional service industries."

And,
yes, technology firms too.

But
Weinstein is convinced that entrepreneurship means far more
than just IT. It also means Argo Tea, a thriving, seven-store
local chain founded in 2003. CEC helped provide networking
opportunities, public relations and financing strategy for
the venture. Typical CEC clients are early stage prospects
demonstrating 40 percent annual revenue growth with employee
counts that double each year. "Our sweet spot is companies
with a half million to $10 million in revenue," says
Weinstein. CEC provides sales expertise — making introductions
so that entrepreneurs can get their first big clients or penetrate
new markets — and financing. Weinstein says his organization
has helped 50 companies in four years raise $40 million in
early stage capital. The goal is to develop entrepreneurs
to where they have "predictive streams of revenue"
that move them into the early middle market.

"At
that point, they've graduated from what we can do for them,"
says the Kellogg alumnus.

What
CEC can do for entrepreneurs, though, has enjoyed a boost
with the March launch of a $10 million fund called the Illinois
Innovation Accelerator Fund (or i2A). This seed-stage, for-profit
investment fund will be "huge for the region," says
Weinstein, especially since several top entrepreneurs have
invested in it, including J.B. Pritzker, Michael Ferro, Larry
Levy '67 and James Tyree.

"It's
a testament to how many transactions we were doing that these
big guys got involved," says Weinstein. CEC will be the
administrate of the member-managed fund, directing deals to
the marquee entrepreneurs. The fund plans to invest in 16
diversified companies that have the chance to become "the
next innovative leaders in the state."

Weinstein's
passion for what he does comes from seeing entrepreneurship's
power to build communities. "It's about wealth creation
and economic development," he says. "Eighty percent
of all new jobs are created by small business. The majority
of those businesses are characterized as entrepreneurial."

The
former technology adviser to the City of Chicago (1996-2000),
Weinstein launched his own venture — Blue Meteor —
in 2000 at the age of 29. It ultimately fizzled but the experience
proved invaluable.

"I
raised $30 million. It was the largest round of capital in
Chicago for the quarter," he recalls. "I was in
over my head quickly."

While
Weinstein says he was a good manager, he had never before
managed 100 people — the number of employees Blue Meteor
gained in just five months. He also "totally underestimated
the sales and revenue challenges" associated with the
fledgling venture. Tough lessons, but ones he says he has
taken to heart.

"I've
turned these around as my strengths now," says Weinstein.
"I was the right guy to start the company, but the second
the company went into huge-growth mode, we needed somebody
with a different skill set."

Weinstein
credits the Kellogg School's teamwork model with giving him
the "greatest toolset you can have when starting a business,
since you are going to have to know your role and know how
to manage other people's talents." Kellogg also helped
him assess business issues and imparted technical skills,
such as accounting, instrumental in managing a budget. In
fact, he encourages would-be entrepreneurs first to get involved
with a company's profit and loss stream.

"Understand
the pressure of revenues. Understand the pressure of selling,"
he says. "That can really help when you launch your own
venture because you are going to be shocked by the
sales pressure."